Thucydides composed speeches for his characters saying what the situation demanded, and called his work a possession for all time. Why is that not simply fabrication?

B. Because he states the method and his standard differed from ours

He announces the practice in Book I, which makes it a declared convention rather than a deception, and judging it by a nineteenth-century documentary standard is anachronism. Watching evidentiary norms change from Herodotus to Ranke is most of what historiography studies.